WMC exclusive: Richard Smith talks FedEx’s future, from drones and robots to a billion dollar super hub

MEMPHIS, Tenn. (WMC) - There’s a new leader at FedEx Express, Tennessee’s No. 1 private employer with 30,000 Memphis-based team members.

His name is Smith. Not Fred but his oldest son, Richard.

The family connection is undoubtedly a huge advantage at the company Fred Smith founded in 1973. The elder Smith is the father of the overnight delivery and logistics business and a genius entrepreneur by any standard.

But in our interview with the younger Smith, there’s mounting evidence the apple doesn’t fall far from the tree.

The FedEx of the near future may feature deliveries by drone as well as ROXO, the FedEx robot.

A rising force helping to navigate FedEx’s future, Richard Smith graduated from Ole Miss Law school in 2005 and joined the company his father founded incognito.

“It got really interesting as I got older and started to look like him,” said Richard. “When I first came in actually, for a few months nobody knew I was his son.”

The younger Smith first worked in FedEx’s “Solutions” group, a sales support team serving major customers. One day, Dad visited his cubicle.

“People are popping up like meerkats, looking out, looking around saying “Oh my God, Fred’s on the floor. Somebody’s getting fired, what’s going on?'” said Richard.

Inevitably, co-workers learned of the family tie.

“For a few months there, I was incognito there, but as my hair got grayer or white and my mannerisms kind of gave me away eventually,” said Richard.

He grew up watching his father, now age 75 and still FedEx’s chairman, president and CEO.

Once Richard joined FedEx, Fred’s first son rose through the ranks and was named vice president of Global Trade Services in 2014.

Then in August, Richard was promoted to lead the company’s 100,000 U.S. employees at FedEx Express.

“So my job, I’m the president of the U.S. region for FedEx Express,” said Richard. “So I oversee all U.S. operations for the Express company, all the hubs, stations, ramps, the pickup and delivery operations, the trucking operations.”

In addition, he’s VP of Global Support, responsible for all the planning, engineering, customs clearance, technology, properties and vehicles -- worldwide.

At the airport, home of FedEx’s largest hub, he’s keeping an eye on construction of the highly-automated, cutting-edge $1.55 billion Memphis World Super Hub.

“We’re putting more automation in because on any given night we’re probably 1,000 to 1,200 workers short out here at the hub," said Richard. "So it’s not going to replace any jobs today that people are doing. What it’s going to allow us to do is process a lot more volume in this facility more productively without having to add heads, because today we can’t find them.”

He says it’s tough finding people to work overnight. The executive says child care and transit pose roadblocks to fully staffing the hub.

One thing is for sure -- millions more packages are coming thanks to online shopping.

“E-commerce from now until about 2026 will grow from 50 million shipments to 100 million shipments a day. E-commerce will represent about 90 percent of all incremental package growth in the United States in that period.”

Enter ROXO the robot. The 200-pound machines will sit at retailers like Lowe’s, AutoZone, Walgreens and Pizza Hut and deliver purchases weighing up to 100 pounds within three miles of a store.

“We think doing it by robot is how you crack the code on doing it economically,” said Richard.

A few weeks ago, FedEx made its first test delivery by drone in Christiansburg, Virginia.

“The value of the drone as I see it is it really optimizes the courier’s day,” he said. “So they don’t replace couriers. They make their route more efficient.”

Richard says the new technology -- drones and robots -- help solve the challenge of the so-called “last mile” where FedEx looks to maximize profitability by making the most of their couriers’ routes.

It’s why FedEx and Amazon decided to go their separate ways back in August.

“We just couldn’t reach an agreement,” said Richard. “We said you know what? We’re going to stand over here with everyone else. Amazon has lots and lots of retail competition. It’s a $550 billion transportation and logistics market. We think we can get more than our fair share of it, particularly by providing superior service, and so we parted ways.”

It’s clear he cherishes the opportunity he’s been given as well as the team he leads.

“I’m incredibly proud,” said Richard. “It is the honor of my life to lead this team here in Memphis, Tennessee. The company that my father started was called Federal Express. And I’ve been coming out here since I was a young boy. But this is the beating heart of Memphis. This is the beat. Our largest hub. And our Express team all across the country and all across the world is the most wonderful team on the planet."

You can join the team. Click here to view FedEx careers.

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